The City Council Should Reject the Mayor’s FY2013 Budget and Adopt the Finance Committee’s Version.

 By Bill Kardash

Next week, the City Council will vote on the FY2013 Budget. Two choices are before them: the “Mayor’s Budget” or the version recommended by the City’s Finance Committee. The “Mayor’s” Budget is a political document, and fosters Mayor Cohen’s view of how he responds to budgetary needs while trying to please City employees, labor unions and other constituencies. The Finance Committee, on the other hand, attempts to bring fiscal reality to the Mayor’s budget, with a much better approach as the City  continues to struggle with cash flow, pension and infrastructure liabilities. Make no mistake: Annapolis is far from out of the economic woods.

 For most residents, the City budget is a mysterious document that impacts City services but, more importantly, dictates how much we will have to pay in property taxes, water and sewer rates and other fees. Beyond that, it is difficult to get residents interested in City finances. Maybe that’s why only a couple of dozen people testified during Public Hearings on the Budget or only 250 people attended the “budget briefings” hosted by ABC from February through May. And, frankly, the Mayor is counting on that apathy.  Mayor Cohen must be thinking: “only a few negative comments; voters get bored with this stuff,  I can get my 5 votes and push this through!” (By the way, for a lesson in how to change the Mayor’s mind, bring on the Green Street School PTA.)

 How can you help? Please contact the Mayor and your Alderman NOW. Better, still, send your message to ALL Council Members to reject the Mayor’s Budget and adopt the Finance Committee recommendations, including:

 1.The City should outsource Refuse Collection: unlike the Mayor’s proposal to retain trash collection within the City DPW, rather than layoff any DPW employees, the City will save almost $12 million over the 7 year contract by having a private company (the same one that handles our recycling) provide that service. To top it off, the contractor will hire12 DPW employees to handle the work. The City intends to re-deploy other refuse collection staff, so no one will lose their job. A real win-win for the City, and a huge win for tax-payers.

2.The City should increase contributions to the pension fund and OPEB: while the Mayor proposed adding $741,000 to the police/fire pension fund, and $100,000 to OPEB (retiree health benefits) the Finance Committee increased the pension contribution to 8.5% of payroll: $1.65 million and OPEB to $600,000. This is essential, because the pension fund is currently underfunded by $20+ million … and it’s not improving. Police and fire personnel should be ecstatic with this decision. OPEB is underfunded by an astronomical $46 million, so even small progress is welcome. The next step is for the City to change from the Defined Benefit system which is strangling local and state pensions around the country, and switch to a Defined Contribution plan, like a 401(K), that most businesses and individuals use, and is being adopted by many cities across the US. This is the only way we can ditch a financial albatross that is outdated.

3.The City should reduce the proposed hiring of new employees from 10 to 2: this is not the time to expand the City work force. The Finance Committee nixed the long list of new hires, ranging from Assistant City Attorney, to Deputy Transportation Director and more. Only the Finance Department and the Public Information office will get new personnel. With a population of 38,500Annapolis has more employees per capita than any city inMaryland. It is high-time for the Mayor to stop growing – and start reducing — the City staff to match City needs.

4.The City should not layer on an additional property tax increase.  With tax assessments about 14% lower, the City can retain the same level of property taxes, thanks to the “constant yield” formula. Any increase in property tax has been strongly rejected by the Finance Committee. Still, expect to see the tax rate increase from $.56 per $100 of assessed value to $.64 per $100 to give the same revenue. If your assessment went down, as most property did, your taxes would remain the same.

 Now it’s up to each of us to contact our Aldermen/Alderwomen so we can muster (at least) five votes to defeat the “Mayor’s Budget” and pass the Finance Committee’s version. You need to do that before June 4. You can learn more about the budget and get Council contact information at www.ABCannapolis.org

 The writer is a resident of Annapolis and Chairman of Annapolitans for A Better Community.

 

 

 

Contact information for Mayor and Council

Contact Your Elected Officials

The City of Annapolis Council consists of the Mayor and eight Aldermen representing the eight Wards of the City….just click on the e-mail address, and you can send a message to any elected official at City Hall.

Ward Name Address Phone Email
Mayor Mayor Joshua J. Cohen (D)
Joshua J. Cohen (D)
City Hall
160 Duke of Gloucester Street
Annapolis, MD 21401
410-263-7997 Mayor@annapolis.gov
One Alderman Richard E. Israel (D)
Alderman
Richard E. Israel (D)
61 Shaw Street
Annapolis, MD 21401
410-263-5607 (day) aldisrael@annapolis.gov
Two Alderman Frederick M. Paone (R)
Alderman
Frederick M. Paone (R)
47 Williams Drive
Annapolis, MD 21401
443-223-8769 (c)
410-267-7604 (h)
aldpaone@annapolis.gov
Three Alderman Classie Gillis Hoyle (D)
Alderwoman
Classie Gillis Hoyle (D)
2089 Forest Drive
Annapolis, MD 21401
443-949-7755(day) aldhoyle@annapolis.gov
Four Alderman Sheila M. Finlayson (D)
Alderwoman
Sheila M. Finlayson (D)
131 Brightwater Drive
Annapolis, MD 21401
410-626-0071(day) aldfinlayson@annapolis.gov
Five Alderman Mathew Silverman (D)
Alderman
Mathew Silverman (D)
City Hall
160 Duke of Gloucester Street
Annapolis, MD 21401
443-995-5441 (day) aldsilverman@annapolis.gov
Six Alderman Kenneth A. Kirby (D)
Alderman
Kenneth A. Kirby (D)
10 Bricin Street

Annapolis, MD 21403

443-510-5241 (day) aldkirby@annapolis.gov
Seven Alderman Ian Pfeiffer (D)
Alderman
Ian Pfeiffer (D)
41 Windwhisper Lane
Annapolis, MD 21403
410-295-6549 (day) aldpfeiffer@annapolis.gov
Eight Alderman Ross H. Arnett, III (D)
Alderman
Ross H. Arnett, III (D)
529 Sixth Street
Annapolis, MD 21403
410-295-7531 (day)
410-295-9743 (h)
aldarnett@annapolis.gov

Property Assessments … YOUR taxes … and the City Budget

If you are a property owner in the City you have received the new assessment for your house or condominium. According to the State Board of Assessments, the “average” property in Annapolis declined 17%, with single-family houses declining 15% and condos decreasing a more significant 24%. For many property owners, the reaction may be: “my assessment went down, and that means my property taxes should go down, too”. If that’s what you thought … think again.

The current City budget for FY 2012 is $95 million; 39% of the City’s revenue comes from the property taxes we pay. The recent (lower) assessment means the City’s property tax collections will decrease from $37 million to $33.3 million … a drop of $3.7 million. If the City wants to “keep” the same level of taxes (we hear they do), the tax rate would have to increase by 11%. For the record, last year the Mayor and Council increased the property tax rate from 53 cents per $100 of assessed value, to 56 cents. As a result, your property taxes increased about 6%. Now, just to keep City tax revenues constant, the rate would increase – again – from 56 cents to 62.2 cents per $100 of assessed value. This is an increase of 11% in your Tax Rate.

What does all this mean to the average home-owner and tax-payer? First, it means the City is highly-dependent on property taxes to fund operations. Second, it means the City continues to run the City as if the economy hasn’t affected home values and tax-payers. In fact, it has refused to cut the cost of running the City for so long that our City of 38,500 people has had to borrow tens of millions of dollars (more than $20 million last year, alone) just to meet its obligations; has a Police and Fire Pension Fund that is “unfunded” by $20 + million; and an additional $44 million “unfunded” liability for “Other Pension Benefits”. If that’s not bad enough, the City also has an estimated $120 million liability for “essential infrastructure”, like our water treatment plant, sewer lines and water pipes, roadways and sidewalks — the critical things we all rely on for day-to-day life. Add all of these together to the City-issued bonds for capital projects, and the debt and liability total for the City is a staggering $200 + million …more than twice the City’s annual budget$300 million … and growing. That’s almost $5,200 for every man, woman and child in the City!

Most prudent families know that, if you are already in debt, you need to pay down debt … not borrow more. If your income has declined, you need to reduce expenses …not spend more. Unfortunately, the City isn’t managed in a financially-prudent way. But we are trying to change that … and we need your help.

Beginning February 29 at 7pm, Annapolitans for a Better Community is hosting a series of “combined community meetings” at Maryland Hall. We have already begun to plan and organize for these meetings and have the support and interest of more than 10 community groups throughout Annapolis. These meetings will help you to understand how the City has gotten into this financial mess …what the Mayor is proposing for next year’s budget … and what we, as tax-payers and residents, can do to change it.

The City has started to plan the next budget. The Mayor has already indicated he is confident he can push through a property tax rate increase. Once the rate is increased, we can expect to pay more property tax every year. We need your help to join with your neighbors to identify specific spending cuts. Essential city services can be maintained, but at a much lower cost. The first step is to understand where the money is going, and then require our elected officials to eliminate wasteful, unnecessary spending. If we don’t take action now, we will get more of the same with costs simply passed on to taxpayers.

Annapolis is at a critical point and we are faced with significant and important fiscal and financial decisions. How we respond can affect our community for generations to come. We all want the City to be the best it can be. Please help us achieve that goal.